Managing Directors' Report 2024
“Since the first quarter of 2024 we have witnessed a relatively sustained bullish phase for Bitcoin, initially kicked off by the U.S. Bitcoin spot ETFs and further fuelled by the more crypto-friendly administration, which assumed office at the start of 2025. That said, it appears that sentiment in the broader digital asset market has, unfortunately, taken a backseat for now, most notably felt through relatively stagnant market conditions in the ‘innovation’ sector of the digital asset economy.
However, it should be recognised that the stark shift in U.S. crypto policy signals the beginning of a potentially ‘golden’ era for crypto, where entrepreneurs are finally empowered to meaningfully innovate through digital assets, new crypto-economic models and on-chain businesses without the previously all prevalent burdens from banks, institutions and regulators since the very inception of Bitcoin, Ethereum and similar technologies. First glimpses of this shift can already be observed by a narrative forming around stablecoin adoption as well as real-world-asset tokenisation, which are two use cases exclusively enabled by robust innovative decentralised technology platforms such as Ethereum and others.
Despite muted market conditions, KR1 plc celebrated a successful year marked by significant achievements with the Company’s income from digital assets in 2024 increasing to £13.0 million (2023: £8.7 million). Since Celestia’s launch in late 2023 and the phase-out of income from Polkadot’s parachain auctions, staking activities on a range of decentralised proof-of-stake networks became the primary contributor to the Company’s income. Income from staking activities increased to £12.8 million for 2024, almost double as compared to the previous year (2023: £6.9 million) and represents 98.3% of the Company’s total income from digital assets for the year.
Since the Company’s inception in 2016, KR1 plc has been among the first publicly listed companies globally exclusively focused on digital assets, leveraging its early-mover advantage to benefit from innovation in the digital asset industry. Due to the Company’s success in identifying and profiting from major industry trends, such as proof-of-stake, interoperability as well as modular blockchain architecture, the underlying business activities of KR1 plc gradually expanded with the Company’s success as staking activities on major proof-of-stake networks with the Company’s underlying digital asset holdings became a significant income driver, positioning the Company strongly to take advantage of the continued growth in decentralised technologies and digital assets. As noted in the Chairman’s Report this reflects a shift in the underlying business model of KR1 plc over the past years, which has evolved into that of a broader digital asset company with a strong focus on innovation and growth, particularly in terms of staking activities on proof-of-stake networks with a view to generate income from digital assets.
As noted in the Overview of KR1 plc as well as previous sections, the Company engages in staking activities on a range of major proof-of-stake networks including Ethereum (through Lido), Polkadot and Celestia and several others. Throughout the year, all of these networks advanced on and executed on their technical roadmaps, each breaking new ground.
Celestia (“TIA”) solidified its position as a leading data availability provider, with its ‘Blobstream’ technology delivering cost-effective solutions for ‘rollups’ and other ‘Layer 2’ networks. As the modular blockchain thesis gains momentum, Celestia’s innovation cements its role in the decentralised application stack.
Polkadot’s Join-Accumulate Machine, termed “JAM”, introduces a high-throughput, trustless approach to scalability, significantly enhancing network performance and user-/developer-friendliness, after re-assessing its technical architecture and reflecting on current adoption trends in the wider digital asset space as well as learnings from its previously parachain-centered design.
Lido strengthened its position as Ethereum’s largest liquid staking product with institutional adoption and further refinements to its roadmap, enhancing decentralisation and resilience with Lido’s ‘V3’ update, set to launch in the next months.
Ethereum itself is also progressing, naturally on a much broader level as a decentralised ecosystem where continued technical progress comes in line with progress on adoption (such as stablecoins and tokenisation), operational and governance structures (new executive leadership for the Ethereum Foundation) as well as with ecosystem alignment with various rollup and interoperability initiatives.
In addition to the KR1 plc’s current staking activities and existing holdings, there are further networks and projects on the radar that should strengthen the Company’s income from digital assets over the upcoming periods. Recently, as announced in March, RedStone launched with a strong entry to the wider blockchain ‘oracle’ market, delivering fast, secure and scalable data feeds with more than US$6 billion of total value secured (as per DefiLlama). By leveraging EigenLayer, RedStone’s RED tokens can be staked by holders and data providers to strengthen RedStone's oracle network and the Company is planning to commence staking activities for RedStone early next year, once the Company’s RED tokens are being unlocked.
Over the upcoming year, another addition to the Company’s staking activities and holdings is expected to be Anoma, a network unifying various blockchains into a single development environment via ‘intents’, as well as its affiliated ‘sister’ project Namada. Further, Tanssi is expected to launch, which is an infrastructure network providing fully customizable and ‘plug-and-play’ shared security systems like EigenLayer and Symbiotic to a broad range of developers. Lastly, Autonomys (formerly Subspace) is also expected to launch, which is a network purpose built for web3-enabled artificial intelligence applications with permanent scalable data storage.
Overall, KR1 plc remains focused on innovation and growth while optimising the Company’s digital asset holdings in light of market conditions to target a sustainable, diversified stream of income from digital assets thereby maximising long-term value for shareholders and contributing to the integrity of high-quality proof-of-stake networks as an active network participant, aligned with the long-term success of the decentralised networks.
Looking ahead, the Company is exploring ‘restaking’, a mechanism that may improve capital efficiency for the Company’s staking activities and its digital asset holdings. As of writing, the global economy is still navigating uncharted waters with market uncertainty prevailing, yet, there are reasons for optimism.
Throughout 2024, as part of our continued policy engagement efforts, we hosted a roundtable at the Labour Party Conference with attendees including Sheldon Mills from the FCA, Lord McNicol, Heidi Alexander MP, and Brian Quintenz (pending US CFTC Chairman) among other industry representatives from Coinbase and Kraken. We were also invited to No. 10 Downing Street and the House of Commons to speak on relevant issues and we will continue engaging with relevant policymakers and regulators throughout 2025.
As we continue into 2025 and beyond, we want to thank you, our shareholders, for your continued support as we keep building out a high-quality digital asset company. As in previous years, KR1 plc remains at the very heart of the digital asset industry, taking advantage of innovation and growth opportunities in the decentralised technologies sector.”
Excerpts taken from KR1 plc’s annual report and audited financial statements for the twelve months ended 31 December 2024, published in the investors’ section of the Company’s website and available as an announcement here.
